In Bhutan all activities related to forestry, are legally governed by the Forest and Nature Conservation Act of 1995. The Act repeals and replaces the Bhutan Forest Act of 1969 that was earlier in force. The Act along with the Forest and Nature Conservation Rules 2006, seeks to ensure protection and sustainable use of forests, wildlife and other natural resources of the country for the benefit of present and future generations.

With 64.5% forest cover, Bhutan is counted among the top 10% countries in the world with the highest species richness. As a signatory to CBD, Bhutan enacted the Biodiversity Act, 2003, which protects rights over indigenous traditional knowledge and seeks to involve indigenous communities in decision-making through community-based natural resources management projects. The Ministry of Agriculture, Royal Government of Bhutan adopted the Biodiversity Rules and Regulations of Bhutan, 2008 for effective implementation of the provisions contained in the Act and to establish a suitable mechanisms for sharing benefits resulting from research, use and/or commercialization of the biological and biochemical resources and associated traditional knowledge.